The statistical evidence shows the real estate market on Martha’s Vineyard remains in a hole, but the anecdotal evidence suggests it might at last be beginning to climb out.
Figures for the period up to the start of August this year show sales numbers and prices both down sharply compared with the same period in 2007 — which was itself a bad year for real estate.
The median price paid for family homes to August 4 was down in all the Island towns, according to figures from Banker and Tradesman online, which compiles its figures from sale documents.
In some cases, the drops were dramatic, such as in Chilmark, where the year-on-year drop was 50 per cent. But the small sales numbers there as in other smaller towns (in Chilmark just three sales this year, and only one last year), can make the price slump appear more dramatic than it really is.
Still, averaged across the Island, sales numbers were down almost 15 per cent compared with the same period in 2007, and prices were off by more than nine per cent.
In Aquinnah, the median sale price was $1.15 million, compared with $1.4 last year; in Chilmark, $1.46 million, compared with $3.19; in Edgartown, $640,000 compared with $699,000; in Oak Bluffs, $540,000 compared with $645,000; in Tisbury, $449,000 compared with $673,000; and in West Tisbury, $700,000 compared with $816,000.
Total sales numbered 93, compared with 109.
That’s the bad news. The good news is that the number of foreclosures on the Island is relatively low; only 11 so far this year, although there has been a significant (but hard to quantify exactly) number of so-called short-sales — that is sales at prices below the mortgage value.
And while total sales for the year are still down on last year, both agents and the figures indicate a recent increase. For July this year there were 19, compared with just 14 in 2007.
“We’re having a petty good quarter,” said Fred Roven of Martha’s Vineyard Buyer Agents.
“The number of sales has been increasing since about March. I think there were about 15 in March, and in June it was close to 40, compared with 28 in June 2007.
“There are a lot more people looking this summer, compared with the past couple of summers. [It’s] firming up.”
He was not ready to predict that the market had bottomed out, though.
“It might be short-lived, depending on interest rates,” he said
“And the low end of the market is still a problem. Prices might still be dropping, which is really a shame. The opportunities for local people are shrinking; a lot are being bought by investors. It’s hard for people to get mortgages, particularly first buyers,” Mr. Roven said.
As for the relatively low number of foreclosures on the Vineyard, he pointed to a number of factors.
First, despite the decline in prices — maybe 15 or 20 per cent down since the top of the market in early 2006 — values were still strong enough that people could in most cases refinance.
Second, banks themselves were more willing to negotiate terms, because they did not want to get stuck with the properties in a bad market.
“Banks really want if possible to get rid of them even before foreclosure,” Mr. Roven said. “Banker and Tradesman magazine has a foreclosure Web site now. Right now they show just one bank-owned property on the Island.”
Mr. Roven said agents generally are leery of bank-owned sales, in large part because they tend to involve financial institutions based off-Island, sometimes halfway around the world.
The alternative to foreclosure, short-selling, also could be problematic because it means dealing not just with the buyer and selling, but also the mortgage provider — again typically a large, far-away institution.
“I know every office has a few they’re working on,” Mr. Roven said. “I’ve worked on a couple; I’m working on what I think is our third one now.
“I hope and think it will go through, but it’s just the luck of the draw who you get. In a huge company it’s just luck whether you get someone capable or not.
“With short sales and bank-owned [properties] sometimes they can take months to get back to a year. And sometimes you never hear back.”
Martha’s Vineyard Savings Bank president Chris Wells said he is cautiously optimistic about the real estate market, and rather more optimistic about the future role in it of smaller local institutions like his.
The number of new mortgages being sought was “pretty solid” in July, traditionally the slowest of the summer months, he said.
But he also said real estate — and other related businesses like building — is by no means out of the woods yet.
“There are still some pretty considerable transactions in some towns. But the $500,000 and down properties are not moving as fast as you would like to see, and I think the average number of days on the market [before it sells] has climbed again for like the third year in a row,” Mr. Wells said.
“We look at that and it is something to be concerned about. And when we talk to local contractors — plumbing and heating and building — where last year at this time they might be scheduling three or four jobs into the fall and winter season, they might be booking one or still waiting for a job,” he said, adding:
“That’s anecdotal. I don’t know if that’s every contractor.”
For banks like his, though, which did not get involved in the risky business of selling loans, these are times of opportunity.
“If you look at the top 10 mortgage lenders as of the end of 2007,” Mr. Wells said, “I think eight of them are gone. As you look down the list they have either stopped lending, or they don’t exist anymore.
“Our bank and other community banks have benefitted . . . a lot of buyers are turning to smaller community banks, where, as little as a year ago they would go to IndyMac or Countrywide — the larger, more nationwide providers.
“It seems that whenever I see a foreclosure I see Wells Fargo, Washington Mutual, I see names that are not local.
“We’ve had three or four loans that have had active attorney involvement, that have been posted in newspapers, for notice of foreclosure. But we’ve had no foreclosure sales, no classified. We don’t own any foreclosed property.
“We’ve been fortunate.”
He added: “I don’t think Edgartown National or the Cape Cod Five or some of the other more local banks that do business here have had a lot of that either.”
He credited it in part to local knowledge. “We have a cyclical economy and we typically see loan delinquency climb in January, February, March. And we’ve had some months higher than normal,” he said.
But in the end it paid to know the people to whom you were lending.
“A lot of times when we look at a credit score, it means something. And then character means something too.
“A lot of times when someone is sitting across the desk from you, that they are going to deliver, regardless of what the numbers says. We can get a handle on substantiating that story faster than a nationwide lender.”